2022 (12) TMI 1489 - AT - Service Tax

Refund claim allowed for export services as no intermediary relationship found under Rule 6A Service Tax Rules 1994

M/s Chevron Philips Chemicals India Pvt. Ltd. Versus Commissioner of Central Tax & Central Excise, Navi Mumbai

CESTAT Mumbai allowed the appeal regarding refund claim rejection. The appellant provided sales promotion and support services to its overseas associated ... Rejection of Refund claim - appellant acted as intermediary or not - providing sales promotion and other sales support services to its associated company, located outside India - entire output services provided by the appellant were exported to its associated company - HELD THAT:- It cannot be said that the appellant has acted as an intermediary in the dealings between the overseas entity and their customers in India. To qualify as an intermediary, service as per the statutory provision, the essential element for consideration is that the parties to the contract should act as principal-agent and that the agent shall be in a position to represent and bind the principal. On reading of the clauses in the agreement vis-à-vis the statutory provisions, it is abundantly clear that the services provided by the appellant to the overseas entity qualify as export in terms of Rule 6A of the Service Tax Rules, 1994 read with Rule 3 of the Place of Provision of Services Rules, 2012. By reading the contents of the said agreement dated 14.09.2009 entered into between the appellant herein and the self same overseas entity, this Tribunal in the case of the appellant itself, M/S CHEVRON PHILLIPS CHEMICALS INDIA PVT. LTD. VERSUS COMMISSIONER OF CGST & CENTRAL EXCISE, MUMBAI EAST [2019 (12) TMI 1066 - CESTAT MUMBAI] has held that the appellant cannot be termed as an intermediary. There are no merits in the impugned order passed by the adjudicating authority in confirming the adjudged demands on the appellant - appeal allowed. Issues:- Early hearing of appeal sought through a miscellaneous application- Confirmation of service tax demand, interest, and penalty by the adjudicating authority- Classification of services provided by the appellant under 'Business Auxiliary Service'- Refund application filed by the appellant for unutilized Cenvat Credit- Allegation of the appellant acting as an intermediary- Interpretation of the contract between the appellant and the overseas entity- Determination of whether the appellant qualifies as an intermediary based on the contract terms- Comparison of the agreement clauses with statutory provisions to ascertain the appellant's role- Previous tribunal decision in a similar case involving the appellant- Final decision on the appeal and setting aside of the impugned orderAnalysis:The appellant filed a miscellaneous application seeking early hearing of the appeal, which was allowed by the tribunal. The appeal challenged the impugned order confirming a service tax demand, interest, and penalty imposed by the Commissioner. The appellant provided sales promotion and other services to an overseas entity, classified under 'Business Auxiliary Service.' The appellant filed a refund application for unutilized Cenvat Credit, leading to a show cause notice alleging intermediary status. The tribunal analyzed the contract between the appellant and the overseas entity, determining that the appellant did not act as an intermediary based on the agreement clauses. The tribunal compared the agreement terms with statutory provisions and previous tribunal decisions involving the appellant, concluding that the appellant did not qualify as an intermediary. Thus, the impugned order was set aside, and the appeal was allowed in favor of the appellant.